In this research, a by-product of paper and timber industries, lignosulphonate (LS), was used to enhance the properties of expansive clay. Laboratory tests included Atterberg limits, Proctor compaction, unconfined compressive strength (UCS), free swell and unconsolidated–undrained (UU) triaxial compression tests, which were conducted on LS-treated and untreated specimens. Moreover, effects of moisture content changes and cyclic wetting and drying on soil properties were assessed. To illustrate strength creation owing to LS-stabilization, scanning electron microscopy was conducted on unstabilized and LS-stabilized clay. The strength properties of the soil improved with LS-stabilization. For both the treated and untreated soils, strength parameters decreased with increase in compaction moisture content. The swell per cent and swell pressure of the expansive clay reduced owing to LS-stabilization. The reduction of plasticity index of the soil because of stabilization changed the category of soil expansivity from high to moderate. These improvements in soil properties are related to the electrostatic reaction that occurs between the LS–water mixture and soil particles, thus leading to soil aggregation.